GRAND RAPIDS, Mich. -- More upscale assortments and an emphasis on better-for-you categories in Center Store are changing the shopping experience at Spartan Stores.
These key changes are also aimed at driving sales gains, as the distributor-retailer here resets its corporate-owned stores to make them more consumer-centric. Spartan has completed remodels and/or resets at eight of its 54 conventional supermarkets and expects to do so at more than 30 by next spring as part of the turnaround strategy designed to help it compete in Michigan's marketplace, which is proliferating with supercenters.
"Our goal was to appropriately position our supermarkets as a niche shopping experience, vs. the supercenters," said Jeanne Norcross, company spokeswoman. A consumer campaign supporting the changes promises a "closer, faster, friendlier" store.
Spartan used category management best practices and syndicated research from ACNielsen, Schaumburg, Ill., to identify categories where it underperformed. While the techniques are far from revolutionary, they were new for the retailer.
"Using the science around category management was not something we had availed ourselves of," said Dennis Eidson, executive vice president of marketing and merchandising, with responsibility for Center Store and category management. "We're taking advantage of low-hanging fruit."
As a result, bottled water got increased display space when possible, and Coca-Cola's non-branded water aisle fixtures were used to divide the category into segments.
"Like every retailer, we're struggling to find enough room in our stores for water," Eidson said.
Carbonated beverages, with more emphasis given to the growing diet segment, occupy the first aisle of the store, reflecting the competitive nature of the category.
An analysis of assortments often led Spartan to increase space devoted to first- and second-tier brands while pruning third- and fourth-tier brands. In diapers, for example, Spartan cut some secondary brands and kept its private label.
Four-foot-long specialty food sections were carved out of aisles in the reset stores and are distinguished by different shelving. The sections may be supplied by Spartan's new specialty warehouse, which serves its corporate-owned and retailer customers with items that are slower-moving, but meet a market demand -- whether it be naturals and organics, regional or ethnic foods.
Categories seen as having a big growth opportunity also got special focus.
In the diaper aisle, for instance, Spartan substituted some of its smaller-package sizes for larger-pack sizes while cutting some second-tier brands. Mass merchandisers and club stores have gained share by carrying bigger sizes, Eidson explained.
"We enabled them by not having the right product assortment. Plus, young moms are critical to any retailer's ability to build a long-term customer base."
Bath tissue underwent similar adjustments. "Multipacks and midpacks are gaining, and the small packs have become a convenience item," he said.
Eidson provided few sales specifics, but said diapers showed double-digit dollar sales gains in the most recent quarter throughout the stores, all of which have incorporated most of the category changes, while CSDs enjoyed "aggressive growth" in the latest quarter.
Elsewhere, Spartan worked to improve organization and adjacencies: Commercial bread now occupies the last aisle of the store so it's less likely to get crushed at the bottom of the cart, and shoppers now find bakeware in the baking ingredients section and baby food near the diapers. "Now, we've made it a baby aisle, if you will," Eidson said. "It sounds like, 'No kidding, everybody does that.' But there were opportunities to improve our flow."
While lagging brands may be getting the cut, private label is entering the spotlight. Spartan began procuring product from Topco Associates, Skokie, Ill., the retailer-owned cooperative. Spartan Stores have begun carrying Topco's Full Circle natural/organics line in its specialty warehouse. Penetration of private label as a percentage of sales is expected to grow 1% this year, Eidson said.